Copyright 2004 Los Angeles Times

Political Opposites Costar in a TV Ratings Drama;
Murdoch's News Corp. and a minority coalition seek to delay new system for counting viewers.

By: James Bates and Meg James, Times Staff Writers

After operating largely out of the public eye for half a century, the company measuring the number of people who watched "Law & Order" on Wednesday night is unwittingly starring in its own drama.

For weeks, Nielsen Media Research has been pummeled publicly by a group dubbed the Don't Count Us Out Coalition, which is made up primarily of Latino and African American advocacy organizations opposed to the TV rating firm's plans to modernize how it measures viewing habits.

"If the Nielsen company gets their way, some of our favorite TV shows could be canceled," says a recorded telephone message sent by the coalition intended for black households in New York. "That is why the NAACP has called on Nielsen to stop and get their act together before they miscount us again."

But what the message -- and a daily barrage of other statements issued by the group -- neglects to say is who is funding the campaign. The answer: News Corp., one of the nation's largest media conglomerates, whose Fox television stations stand to lose tens of millions of dollars from the Nielsen changeover.

In fact, what makes the coalition most extraordinary is the way it unites political opposites as bedfellows.

At the helm of News Corp. is Rupert Murdoch, who has used his media empire to push a political agenda embraced by conservatives. Yet it's Democratic politicians and activists who are the coalition's public face.

"Most of the people who are aligned against Nielsen here would not normally be allies with Fox -- and that's putting it mildly," acknowledged coalition consultant Mark Fabiani, a former top Clinton administration aide who once denounced Fox News as "an avowed enemy."

The Don't Count Us Out campaign aims to delay Nielsen's efforts to launch today in New York and next month in Los Angeles a system that uses electronic boxes and push-button devices to record what TV programs people watch. The setup is designed to replace antiquated handwritten diaries that have been used since the 1950s to establish TV advertising rates.

Critics contend that black and Latino households have long been undercounted as part of Nielsen's sample audience. The fear is that the new system will make the problem worse.

"There are always clients who have questions about their ratings, but it's never gone from that to this whole firestorm," said Susan Whiting, Nielsen's chief executive. "And that is clearly related to News Corp.'s influence and money."

The stakes are high all around. With advertisers steering as much as $25 billion a year in business to local TV stations, "a ratings point here and there makes a difference," said S.G. Cowen media analyst James Marsh. "Anytime you change a system of measurement, there will be winners and losers. And the losers are going to fight, scratch and claw to make sure they don't lose too much."

For its part, Nielsen plans to charge clients a comparatively high fee for the electronic system, which provides daily ratings information. (It declined to provide details.) The old diary arrangement, by contrast, collects viewer data just four times a year during "sweeps" months.

The minority community groups involved in Don't Count Us Out say they are far from pawns of News Corp. -- even if the corporate giant is bankrolling the campaign, estimated to cost $2 million to $5 million. In some cases, they note that they have had problems for years with Nielsen's sampling.

"Did Fox recruit me? No," said Lorraine Cortes-Vazquez, president of the New York-based Hispanic Federation and a leader of the coalition. "I can't be any plainer than that."

News Corp.'s Gary Ginsberg said it was ludicrous to suggest that coalition members such as the Hispanic Federation and 100 Black Men were being exploited.

"The notion that they would be doing our bidding is laughable and an insult to the legitimacy of their concerns," he said.

What's more, News Corp. is not the only major media company that has problems with the Nielsen system, which is dubbed the "people meter." On Wednesday, Viacom Inc.'s CBS urged Nielsen to delay its rollout of the service until it can ensure that its sample is truly representative of all parts of the community.

"The world would not end" if Nielsen waited, said Ceril Shagrin, head of research at Univision Communications Inc., a Spanish-language network. "Nielsen is the only source of audience estimates. And when you only have one source for the data, that source needs to do whatever it can to make sure the estimates are accurate."

Still, even TV executives who believe that the Nielsen sample has some problems are grousing about what they see as News Corp.'s heavy-handed tactics. One industry insider called News Corp.'s actions "unconscionable," expressing worry that demonizing Nielsen will make it even tougher to recruit blacks and Latinos into the sample.

The Media Rating Council, an industry group that has found flaws with the new system, also made clear that it "condemns the use of public campaigns" by "a Nielsen client" -- a thinly veiled reference to News Corp.'s backing of Don't Count Us Out.

So aggressive is the effort that at one point, Nielsen's phones and e-mail crashed after being overloaded with complaints stirred up by the campaign. This week, one TV spot airing in New York provides a toll-free number to protest the people meter rollout. Callers are routed directly into the office of CEO Whiting.

The fight has taken on a degree of brinkmanship. Nielsen has rejected calls to postpone the introduction of its new system until December. It has offered as a compromise to keep the diary system in use -- alongside the people meter -- for three months. But Don't Count Us Out isn't letting up, threatening legal action Wednesday.

The Nielsen-News Corp. rift goes back to early this year, when preliminary people meter data suggested that viewership for Fox's local TV stations was lower than previously thought.

Fox-owned stations, including its UPN affiliates, air a relatively large number of shows geared toward African Americans. Fox says its ratings decline proves that blacks are being undercounted in the people meter sample. Nielsen says the decline suggests that many black viewers have simply migrated to cable channels such as Black Entertainment Television, which has seen its ratings soar. BET endorses the people meters.

In late February, News Corp. requested a meeting at Nielsen's offices in Manhattan's East Village. About the only thing the two sides agree on is that the session took place.

On one side of the table were News Corp. President Peter Chernin and Murdoch's 32-year-old son, Lachlan, who is in charge of the lucrative Fox station group. News Corp. says the two men asked for Nielsen to delay the rollout of the new system until problems with the sample could be fixed.

Nielsen's chief executive, Whiting, recalls the meeting differently. She says Chernin threatened Nielsen, telling her, "We will stop you. We will discredit you." News Corp. denies making a threat.

Within a short time, both sides were mobilizing high- powered public relations firms and political consultants. Nielsen retained Robinson Lerer & Montgomery, which has handled "crisis management" for troubled companies such as Tyco and Adelphia. It also tapped Bill Lynch, an African American and former New York deputy mayor.

News Corp. took its case to Glover Park Group, a Democratic consulting firm whose partners include Clinton White House Press Secretary Joe Lockhart, former top Al Gore aide Mike Feldman and Howard Wolfson, who served as communications chief for Hillary Rodham Clinton's Senate campaign.

They quickly found a spokesman in Alex Nogales, president of the National Hispanic Media Coalition. He has long criticized Nielsen and has felt not the slightest unease about allying with News Corp. -- even though he has bashed it, as well, for contributing to the media industry's rapid consolidation.

"We come at it from a nonprofit point of view; they are coming at it from a monetary point of view," Nogales said. "We are shoulder to shoulder with Fox but for very different reasons."

A company headed by another Clinton White House press secretary, Mike McCurry, registered the domain of the Don't Count Us Out website.

Glover Park then hired Fabiani, who in turn recruited longtime Los Angeles City Hall lobbyist Maureen Kindel. She persuaded local politicians such as City Councilman Bernard C. Parks to blast Nielsen.

In late March, Don't Count Us Out troops marched on New York's City Hall. "That was the first big kaboom," Whiting said. "Then letters began pouring in."

Days later, Whiting attended a small industry gathering to discuss interactive TV. Sitting across from her was Rupert Murdoch, who was intent on talking about another topic: people meters. According to one person in the room, Murdoch was aggressive and accused Nielsen "of trying to ruin their business."

The confrontation was followed by Don't Count Us Out news conferences, an ad blitz, more rallies, intense lobbying on Capitol Hill and, according to Nielsen, disproportionate coverage of the dispute by Fox.

Although Nielsen is determined to move forward with the people meters, some say News Corp. has definitely hurt the firm's reputation. Nielsen, said Lynch, has "lost the spin war."